Vodafone $1 a day for 10MB in court

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#526162 27-Sep-2011 12:48

It is crazy, especially when the Commerce Commission are clearly wrong with their assumptions on how Vodafone's billing worked.

Based upon Vodafone's explanation above of how billing was charged ($5 per MB up to $1) it's simply not possible to use 2% of the 10MB and be charged $1. If the Commerce Commion have proof that this occured I'd love to see it. If they don't they should be fronting up to the court and admitting they've got things wrong. I did plenty of testing at the time because there were various discussions on here, and had no doubts that's exactly how Vodafone billing was working.

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SCUBADOO

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#526165 27-Sep-2011 12:52

What part of this quote from the NZ Herald link provided by freitasm is ambiguous?
"It also promised: "If you use less than $1 a day we'll only charge for what you used"."

sbiddle

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#526166 27-Sep-2011 12:55

SCUBADOO: What part of this quote from the NZ Herald link provided by freitasm is ambiguous?
"It also promised: "If you use less than $1 a day we'll only charge for what you used"."

And that's exactly how it worked. The $1 was not an upfront charge.

NonprayingMantis

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#526169 27-Sep-2011 13:02

sbiddle: It is crazy, especially when the Commerce Commission are clearly wrong with their assumptions on how Vodafone's billing worked.

Based upon Vodafone's explanation above of how billing was charged ($5 per MB up to $1) it's simply not possible to use 2% of the 10MB and be charged $1. If the Commerce Commion have proof that this occured I'd love to see it. If they don't they should be fronting up to the court and admitting they've got things wrong. I did plenty of testing at the time because there were various discussions on here, and had no doubts that's exactly how Vodafone billing was working.

$5/MB = 0.5c/KB effective rate up to the first $1

at that rate, the data used to hit $1 = 200KB (since 100/0.5 = 200)

2% of 10MB = 200KB (since 10000 * 0.02 = 200)

therefore your $1 charge is incurred after using only 2% of the 10MB 'limit' (actually slightly faster in most cases because shorter sessions would be rounded up to the nearest xKB(10KB?) even when using less)

Hinko

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#526171 27-Sep-2011 13:06

freitasm: And it happened... Vodafone lost the case and fined $400,000.

The commission had said Vodafone misled customers during its $1 a Day campaign between July and November 2008. Commission lawyer Nick Flanagan said customers thought they were paying "$1 a day" for 10 megabytes of data but they were actually charged $1 after using only about 2 per cent of the 10MB allocation.

Mr Flanagan told the hearing in August that three complaints to the commission suggested customers thought they would pay only a fraction of the $1 if they did not use all 10MB.

One complainant, Linda McCracken, told the commission, "I took this to be that if, for example, I used 5MB it would only cost me 50c and if I used 2.5MB it would cost me 25c."

Insane...

I beg your pardon? Nothing wrong with Linda's assumption, particuarly in the absence of useful detailed clarification.

Good decision. Will Vodafone improve their act? Don't hold your breath.

dejadeadnz

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#526173 27-Sep-2011 13:08

sbiddle: It is crazy, especially when the Commerce Commission are clearly wrong with their assumptions on how Vodafone's billing worked.

Based upon Vodafone's explanation above of how billing was charged ($5 per MB up to $1) it's simply not possible to use 2% of the 10MB and be charged $1. If the Commerce Commion have proof that this occured I'd love to see it. If they don't they should be fronting up to the court and admitting they've got things wrong. I did plenty of testing at the time because there were various discussions on here, and had no doubts that's exactly how Vodafone billing was working.

You do realise that a judge has ruled against Vodafone after hearing all evidence? Unless you have some actual proof that the Commerce Commission did not understand what was going on or that it intentionally misled the court, you really shouldn't be making that sort of allegation based on some bald assertion that you have no doubt things aren't as the Commission claimed. And VF had on its side an experienced QC - somehow if the Commission was entirely barking up the wrong tree, one would expect him to say so.

Judge Kiernan is a very experienced judge, and a former crown solicitor -- I don't think she's as easily fooled as a bunch of geeks might think

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#526174 27-Sep-2011 13:11

Hinko:

I beg your pardon? Nothing wrong with Linda's assumption, particuarly in the absence of useful detailed clarification.

Good decision. Will Vodafone improve their act? Don't hold your breath.

Don't give us this kind of common sense. What's a judge's decision after a full hearing where VF was represented by a QC worth? Based on VF's explanation, the Commission and the Judge are both clearly wrong! Some people don't even need to read the court's decision to know!

Hinko

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#526175 27-Sep-2011 13:13

I note http://www.nzherald.co.nz/technology/news/article.cfm?c_id=5&objectid=10754673 which includes:

For Vodafone, Bruce Gray, QC, said the telco never set out to mislead customers and likened the billing plan to all-day parking. People who paid for all-day parking but left at 11am did not expect a refund on their remaining hours.

In my view that's pretty hopeful and desperate. The reason parking meters don't refund is it is difficult to run an account on a meter. Rocket science? Well I guess it depends on the grey matter considering the topic. Clearly the Judge was not persuaded the QC's way.

On the other hand where there is an account running it is entirely reasonable for the correct amount to apply, and credits be placed if and when appropriate.

sbiddle

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#526177 27-Sep-2011 13:19

NonprayingMantis:
sbiddle: It is crazy, especially when the Commerce Commission are clearly wrong with their assumptions on how Vodafone's billing worked.

Based upon Vodafone's explanation above of how billing was charged ($5 per MB up to $1) it's simply not possible to use 2% of the 10MB and be charged $1. If the Commerce Commion have proof that this occured I'd love to see it. If they don't they should be fronting up to the court and admitting they've got things wrong. I did plenty of testing at the time because there were various discussions on here, and had no doubts that's exactly how Vodafone billing was working.

$5/MB = 0.5c/KB effective rate up to the first $1

at that rate, the data used to hit $1 = 200KB (since 100/0.5 = 200)

2% of 10MB = 200KB (since 10000 * 0.02 = 200)

therefore your $1 charge is incurred after using only 2% of the 10MB 'limit' (actually slightly faster in most cases because shorter sessions would be rounded up to the nearest xKB(10KB?) even when using less)

My math failed me.

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#526181 27-Sep-2011 13:26

Hinko:
freitasm: And it happened... Vodafone lost the case and fined $400,000.

The commission had said Vodafone misled customers during its $1 a Day campaign between July and November 2008. Commission lawyer Nick Flanagan said customers thought they were paying "$1 a day" for 10 megabytes of data but they were actually charged $1 after using only about 2 per cent of the 10MB allocation.

Mr Flanagan told the hearing in August that three complaints to the commission suggested customers thought they would pay only a fraction of the $1 if they did not use all 10MB.

One complainant, Linda McCracken, told the commission, "I took this to be that if, for example, I used 5MB it would only cost me 50c and if I used 2.5MB it would cost me 25c."

Insane...

I beg your pardon? Nothing wrong with Linda's assumption, particuarly in the absence of useful detailed clarification.

Good decision. Will Vodafone improve their act? Don't hold your breath.

Legally they must. At 400K a pop, it's certainly in their best interest.

NonprayingMantis

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#526191 27-Sep-2011 13:42

Hinko: I note http://www.nzherald.co.nz/technology/news/article.cfm?c_id=5&objectid=10754673 which includes:

For Vodafone, Bruce Gray, QC, said the telco never set out to mislead customers and likened the billing plan to all-day parking. People who paid for all-day parking but left at 11am did not expect a refund on their remaining hours.

In my view that's pretty hopeful and desperate. The reason parking meters don't refund is it is difficult to run an account on a meter. Rocket science? Well I guess it depends on the grey matter considering the topic. Clearly the Judge was not persuaded the QC's way.

On the other hand where there is an account running it is entirely reasonable for the correct amount to apply, and credits be placed if and when appropriate.

He would have been better to liken it to almost every single mobile plan out there.

You pay for x amount of minutes, txts, or MB over a certain period of time. If you don’t use the entire allotment up within that time, you will have still paid for the total amount and you don’t get a refund.

In this case, the time period happens to be 'a day'

Hinko

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#526199 27-Sep-2011 13:58

NonprayingMantis:
Hinko: I note http://www.nzherald.co.nz/technology/news/article.cfm?c_id=5&objectid=10754673 which includes:

For Vodafone, Bruce Gray, QC, said the telco never set out to mislead customers and likened the billing plan to all-day parking. People who paid for all-day parking but left at 11am did not expect a refund on their remaining hours.

In my view that's pretty hopeful and desperate. The reason parking meters don't refund is it is difficult to run an account on a meter. Rocket science? Well I guess it depends on the grey matter considering the topic. Clearly the Judge was not persuaded the QC's way.

On the other hand where there is an account running it is entirely reasonable for the correct amount to apply, and credits be placed if and when appropriate.

He would have been better to liken it to almost every single mobile plan out there.

You pay for x amount of minutes, txts, or MB over a certain period of time. If you don’t use the entire allotment up within that time, you will have still paid for the total amount and you don’t get a refund.

In this case, the time period happens to be 'a day'

I agree that he would have been better to run that line however I doubt it would have swayed the decision. The QC had the fundamental hurdle to pass of "If you use less than $1 a day we'll only charge for what you used". I expect it was going to take more than the proposed day basis to sway the judge.

The variety of opinion presented here is interesting, presuming most of it is wiithout commercial bias. Its good to see peoples opinions pinned up, and how well they stack up in reality over time.

NonprayingMantis

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#526203 27-Sep-2011 14:05

Hinko:
NonprayingMantis:
Hinko: I note http://www.nzherald.co.nz/technology/news/article.cfm?c_id=5&objectid=10754673 which includes:

For Vodafone, Bruce Gray, QC, said the telco never set out to mislead customers and likened the billing plan to all-day parking. People who paid for all-day parking but left at 11am did not expect a refund on their remaining hours.

In my view that's pretty hopeful and desperate. The reason parking meters don't refund is it is difficult to run an account on a meter. Rocket science? Well I guess it depends on the grey matter considering the topic. Clearly the Judge was not persuaded the QC's way.

On the other hand where there is an account running it is entirely reasonable for the correct amount to apply, and credits be placed if and when appropriate.

He would have been better to liken it to almost every single mobile plan out there.

You pay for x amount of minutes, txts, or MB over a certain period of time. If you don’t use the entire allotment up within that time, you will have still paid for the total amount and you don’t get a refund.

In this case, the time period happens to be 'a day'

I agree that he would have been better to run that line however I doubt it would have swayed the decision. The QC had the fundamental hurdle to pass of "If you use less than $1 a day we'll only charge for what you used". I expect it was going to take more than the proposed day basis to sway the judge.

The variety of opinion presented here is interesting, presuming most of it is wiithout commercial bias. Its good to see peoples opinions pinned up, and how well they stack up in reality over time.

absolutely agree. that is the very thing that stung them. Had they not said that, then probably the whole thing would have been fine. "pay for what you use" implies that your payment is prorated. In this case it clearly wasn't prorated, it was very heavily stacked towards the front.

Jaxar

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#526274 27-Sep-2011 15:56

First off a couple of disclaimers. Please take note of my signature with the commercial bias remark. Secondly I don't know the mobile area I generally limit my comments to fixed line stuff here at geekzone as that is my area of expertise.

First thing I noticed in the Herald was, "Mr Flanagan said there was no way customers would have known Vodafone's pricing structure."

Correct me if I am wrong here but surely VF had the explanation of the pricing per MB on the website or for the asking through the call centre. Hopefully this is wildly misreported.

My second question is the article also mentions the decision would be released in writing later today. Does anybody know where I could find this?

As for my personal opinion. I wonder if the ruling will create more confusion about purchasing anything be it time, data or some other service in blocks than was created by the $1 for 10MB deal. I would reiterate that that I am only making this speculation based on the information provided in the article and this thread.

Please note: I have a professional bias towards Vodafone.

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#526280 27-Sep-2011 16:01

Every time I got to the US I top up my AT&T prepay account with $40. I use $20 to purchase a 500MB mobile data pack and the rest I use on their "$1 all you can eat" mobile voice/SMS plan.

It works like this: if I send a SMS or engage in a phone call then they take $1 from my balance and I can use SMS and voice as many times as I want on that day until midnight.

[sarcasm]

Now I wonder, since most of the times I only used one SMS a day, surely I should sue AT&T for charging me $1 per SMS, when their list price is a lot less than that. Or should I expect the company to refund me the difference at the end of the day?

[/sarcasm]

In all I think the customer should educate themselves. If they don't understand how they are paying for something they should ask before assuming things. Ignorance is not an excuse.

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